State of Illinois FY2012 Recommended Operating and Capital Budgets: Analysis and Recommendations
May 9, 2011
The Civic Federation opposes Governor Pat Quinn’s $52.7 billion FY2012 recommended operating budget for the State of Illinois because it is unbalanced by approximately $2.4 billion and is based on the premise that long-term borrowing is the right tool to dig the State out from under its massive backlog of unpaid bills and other obligations. To the contrary, the Governor’s proposed borrowing is likely to make the State’s financial condition worse over time.
Although the Civic Federation is encouraged that Governor Quinn has taken steps to resolve the fiscal crisis—including signing temporary income tax increase legislation and recommending some cuts in spending—we cannot support his FY2012 State of Illinois operating budget because it overestimates revenues and continues to rely heavily on borrowing for operations, which effectively pushes current financial problems into the future.
Despite a major income tax increase that took effect on January 1, 2011, the Governor’s FY2012 budget recommendation would create a $1.45 billion operating shortfall due to a proposed increase in expenditures. In addition, the Governor’s General Funds revenue estimates for FY2012 are overstated by roughly $970.9 million because an inadequate amount of income tax revenues is set aside to pay down a backlog of business tax refunds. The actual operating shortfall for the year totals approximately $2.4 billion.